After the approval of the ETF, Bitcoin prices have been facing pressure. However, there has been a recent surge in the value of the OG-cryptocurrency, reaching the $47,000 mark. This has brought a sense of optimism among investors. On the other hand, Bloomberg has released a report stating that the crypto market may not be equipped to handle such a significant price increase.
The recent drop in FTX and the sudden rise in altcoin prices are a reflection of the crypto market’s instability. Despite the current belief among investors that digital currencies are on the rise, there are still several issues plaguing the market. The US courts have been pushing for action against securities fraud in the cryptocurrency industry. This has led to the final approval of Bitcoin exchange-traded funds by the Securities and Exchange Commission, reigniting interest in high-risk assets like technology shares and tokens.
However, the experiences of cryptocurrency traders are not solely determined by the prices of major coins like Bitcoin and Ether. The crypto market still has its challenges, especially for investors who entered the space in 2021. For example, FTX, an exchange platform founded by Sam Bankman-Fried, may have seemed like a logical investment choice, but it also offers 12,000 smaller and riskier “altcoins.” These altcoins can either become obsolete or highly volatile, making them a risky investment.
Unlike traditional markets, where volatility is seen as a negative factor, it can be a way for investors to earn higher profits in the crypto market. According to a research article published in Science Direct, cryptocurrency traders tend to follow short-term trading trends, often with high trading frequency and sentiment. This suggests that cryptocurrency trading is noisy, and investors are lured in by the potential for large payouts, distancing themselves from the risks of a stock market crash. This also indicates that cryptocurrency investors are driven by a desire to take risks.
While price surges in Bitcoin offer significant returns, the same cannot be said for less valuable or more volatile altcoins. This is why investors are often advised to refrain from investing in secondary tokens.
Currently, Bitcoin prices have risen above $49,000 after dropping to $43,000. At the time of writing, the OG-cryptocurrency was trading at $49,741.70, representing a 3.2% increase in the last 24 hours. Its market capitalization has also risen by 3.17%, reaching $75.7 billion.
The outlook for most cryptocurrencies, especially Bitcoin, is positive. Many institutions have predicted that the value of the OG-crypto will continue to rise in the future. For instance, Bitwise forecasts that by 2024, the price of Bitcoin could surpass $80,000, and institutional investments in Bitcoin are expected to increase in the first half of 2024, according to Coinbase.